“Your house is on fire,” begins the age-old conundrum; “What would you rescue?” Assuming partner/children/pet/lodger/flatmate is a given for all but the most heartless, the answer has typically been something along the lines of: photo albums, home movies, books, record collections, precious art, important documents, etc. Now the answer is much simpler: the computer, the modern-day home of all of the above. But what happens to all these digital treasures when we go up in smoke?

A recent survey has shown that the average Brit amasses £200 ($320) worth of music, film and other downloads, worth a current total of £2.3 billion ($3.7 billion). More and more of us are now leaving internet passwords and digital assets in our wills.

The research was carried out by the Centre for Creative & Social Technologies (CAST) at Goldsmiths University of London and commissioned by hosting company Rackspace. More than half (53 per cent) of the 2,000 adults polled held “treasured possessions” in cloud services such as Facebook, Hotmail, Flickr and iCloud, with 11 per cent admitting to including, or planning to include, passwords in bequests to their heirs.

People pass on things they would have valued traditionally but that have now taken digital form: photographs, home videos, books and music

Chris Brauer, CAST co-director, explains: “People pass on things they would have valued traditionally but that have now taken digital form: photographs, home videos, books and music. Some people pass on a list of log-ins to their accounts, though not everyone wants their heirs having access to private communications and thoughts, and some opt instead for a specific filtered set of things they value and believe their heirs will value.

“Lawyers are driving a lot of the early adoption of digital inheritance practices by raising the issue with clients when drawing up or updating wills. Often people simply wouldn’t have thought about it but suddenly realize that, yes, there are digital objects or accounts they value and want to pass on.”

The idea of a digital inheritance itself may be new, but as Wired columnist Daniel Nye Griffiths says: “The internet has the same issues any other repository – the balance of accessibility and security. That is, if you give your wife the keys to the safety deposit box for when you die, you run the risk that she will use the safety deposit box key during your lifetime and find out about your second wife in Derby. And vice versa.”

Naturally, entrepreneurial sorts have spotted the potential here and specialist digital legacy services such as Legacy Locker and the crudely-named iCroak have sprung up in what is sure to become a busier marketplace. iCroak in particular plays on the fear that passwords included in regular wills can be accessed by all manner of secretaries, admin staff, witnesses and lawyers.

Griffiths advises treading carefully. “I would be cautious of putting all my passwords in one place online,” he says. “You can’t review the security in place personally, and a repository of, say, people’s bank IDs would be an incredibly tempting target for hackers.”

Instead, he points in the direction of sites such as Dead Man’s Switch and Death Switch or the use ofencrypted emails to your nearest and dearest.

These days we have more online accounts than ever before, and what to do with them post-mortem raises some interesting questions. Some automatically close after periods of inactivity. But what about email and social media, things we use on a daily basis?

Following the tragic Virginia Tech shootings, Facebook introduced a memorial state for profiles of the deceased in which status updates and any group links are removed, leaving the user’s confirmed friends to use their wall to post condolences and memories. An account will be removed altogether if Facebook receives a request from next of kin.

Most major web-based email providers will do the same if provided with proof of death and other paperwork.

Twitter, however, is less forthcoming, with no apparent guidelines of what to do. But if you gain access to the deceased’s email, you may well be able to find log-in details in order to delete the account.

We are only just beginning to think about passing on such digital keepsakes, but according to Brauer it is going to “explode in the public consciousness”. The CAST study suggests that by 2020, a third of us will keep all of our music online, a quarter of us will store our entire photo collection online, and one in seven of us will own only e-books, not printed.

If that all sounds like a bleak, dystopian future, void of physical artefacts, rest assured. In summary of his study, Chris Brauer says, quite rationally: “There will probably always be a combination of physical and digital objects among our valuables, but they are moving to a kind of equivalency in popular culture where we don’t differentiate value based on physicality or virtuality.”

Which, with any luck, should value our fabulous little online offering somewhere in the region of several diamond-encrusted Damien Hirst skulls. Now, who to leave those passwords to…

Richard was assistant editor on high50 for three years and is now digital editor at boutique travel company Mr & Mrs Smith. He has written for Time Out, Contagious and The Huffington Post.